19th Nov 2013 09:49
LONDON (Alliance News) - Big Yellow Group PLC said Tuesday first-half pretax profit increased to GBP34.5 million as revenues declined by 1%, attributed in part to the VAT introduction in October.
Pretax profit for the half-year rose from GBP27.24 million as the self storage firm reported a 1% drop in revenue for the six months to September 30 of GBP35.9 million on last year's GBP36.2 million.
The firm said it had performed well during the period, despite the introduction of VAT in the second-half of last year having an impact on revenues. The firm said that its occupancy growth, combined with an improvement in yield, has offset the adverse impact of the VAT introduction on its established portfolio during the six months as it achieved 5.1% revenue growth for October, the anniversary month of its introduction.
Store revenue for the six months was slightly down on the GBP35.5 million reported last year at GBP35.1 million, though up 7% on the previous half-year (ending 1 March 2013 at GBP32.8 million). The firm said this is in line with its full-year guidance and is the results of the, "reduction in the average rental yield following the introduction of VAT offset in part by growth in occupancy."
Total store revenue for the second quarter dropped by 1% to GBP18.4 million on the comparable period last year but was was up 10% on the quarter to June 2013 (GBP16.7 million).
Store earnings before interest, taxes, depreciation, and amortisation was GBP22.9 million, down 1% from GBP23.2 million for the same period last year. The overall store margin was 65.2%, down slightly from 65.4% for the same period last year.
Big Yellow made a GBP14.2 million adjusted profit before tax, up 2% on the GBP13.9 million for the same period last year and up 22% on the six months to March 31 2013.
Occupancy growth over the six month period across Big Yellow stores was 232,000 sq ft, down on 243,000 sq ft last year. Wholly-owned store occupancy growth in the six month period was 188,000 sq ft, up from 177,000 sq ft in 2012. The 32 established store portfolio increased in occupancy from 72.8% at the end of March 2013 to 77.1% in September 2013. The 22 lease-up stores grew in occupancy from 54.3% in March 2013 to 61.9% in September 2013. Overall like-for-like closing occupancy for the Group is 70.5% compared to 64.8% at 31 March 2013, said the company. The 12 stores in Big Yellow Limited Partnership increased in occupancy to 60.5% from the 54.6% reported in March 2013, an increase of 44,000 sq ft.
During the period the storage firm said net rent per square foot was up 2.9%, compared to April 1 2013. However, Big Yellow records a seasonal loss of occupancy in the seven weeks since the period end, significantly down on last year, at 32,000 sq ft, compared to a 91,000 sq ft loss in 2012.
Big Yellow announced a 60% increase in its interim dividend, in line with its new dividend policy to distribute 80% of full-year adjusted earnings per share. The firm declared an interim dividend of 8 pence per share.
Looking ahead, the firm said its 70,000 sq ft MLA Gypsy Corner store on A40 in West London is under construction and expected to open 1 April 2014 on time and on budget.
Nicholas Vetch, Executive Chairman of the company, said, "In our final statement earlier this year we expressed some cautious grounds for optimism which currently looks justified, given the improving economic picture and current trading. We have significant belief in London reinforcing its position as one of the world's leading cities, if not the pre-eminent one. The weighting of our portfolio to the Greater London area will benefit from the capital's growth.
"We believe that the Company will continue to deliver attractive sustainable returns, on a relatively low risk and limited volatility basis on a long term view. The total returns set out above well illustrate the power of compounding."
Shares in the storage company are up 0.53% at 467.68 pence per share Tuesday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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